Low Indian solar tariffs begin to backfire

Consistent naysayers have predicted that the strategy of presuming module prices would continue to fall would backfire. Credit: Renew Power

After two years of tumbling solar tariffs hitting the headlines, the Indian industry is feeling the consequences of its risk-taking for the first time, with a series of reversing market conditions and contract renegotiations sparking serious concern.

Following multiple local reports, an executive from a prominent Indian PV developer confirmed to PV Tech, under condition of anonymity, that almost all major Chinese module suppliers have been backing out or reneging on module supply contracts in India, with Trina Solar as the only exception.

A number of factors have led to this situation, including the ravenous appetite that China has for downstream deployment this year, and a lack of polysilicon supply. China’s installations – well above targets – have raised the price of solar equipment for all other markets relying on Chinese supply. India happens to be hugely reliant on Chinese module imports.

Ever since tariffs started tumbling, there have been consistent naysayers predicting that the strategy of presuming module prices would continue to fall would backfire. Consultancy firm Bridge to India, in its latest market insight, said that Indian firms have tended to factor in a 15-20% annual cost reduction or even higher when bidding for projects, so the recent price increases have come as “a shock to the sector”. Indeed expectations of US$0.28/Wp prices this quarter are being quoted at about US$0.34/Wp, said the consultancy – not to mention the 5% addition of the Goods and Services Tax (GST).

Bridge to India added that up to 1GW of projects due to be completed this year could face delays – before even considering the looming threat of anti-dumping duties. An investigation into Chinese, Taiwanese and Malaysian imports is currently under way with the possibility of a provisional anti-dumping duty as early as September 2017. However, the consultancy noted that an oversupply situation for multi-crystalline modules could return for India since the driving force of China’s next additions – the Top Runner programme – will focus on high efficiency mono modules.

Separate Discom threat

In an altogether different issue, Global analysis firm Crisil Research has also noted that the aggressive low bids have caused a “recoiling” in the industry at large, as the country’s distribution companies (discoms) call for renegotiation of power purchase agreements (PPAs) they have signed at higher tariffs.

With this in mind, Bridge to India’s analysis that Indian developers are “caught between a rock and a hard place” seems apt.

Discoms – even some of the financially strongest – have openly noted reservations about honouring letters of Intent for PPAs for as much as 3GW of projects, said Crisil, including Andhra Pradesh (~1.1GW), Gujarat (~250MW), Karnataka (~900MW) and Tamil Nadu (500MW).

Analysing the difference between PPA tariffs and average power purchase cost (APPC) in a state, Prasad Koparkar, senior director, Crisil Research, said: “In all, around 7GW of solar projects tendered or awarded at tariffs of INR5-8/unit over fiscal 2015-2017 could be at risk. PPAs or letters of intent for these capacities, in Uttar Pradesh, Andhra Pradesh, Karnataka, Telangana and Punjab, were inked at tariffs 12-66% higher than the APPC of these states.”

Including solar and wind energy, Crisil Research believes investments worth INR480 billion (US$7.5 bilion) are currently at risk. It also listed a number of potential knock-on effects including multiple court cases and banks becoming more cautious about lending to renewable energy projects.

Crisil did however note a “glimmer of hope” given their analysis of standard PPAs in major states indicating that contract termination is not legally allowed if there is no delay in project commissioning.

Source: PV Tech

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India issues new specifications for solar power modules

The new standard specifications will come into force on the expiry of one year from the date of their publication in the Official Gazette, 30 August 2017

India issues new specifications for solar power modulesNew Delhi: India’s Ministry of New and Renewable Energy (MNRE) has issued an order for new set of standard specifications for solar Photo-Voltaic (PV) modules which will come into force after one year from the date of their notification on Wednesday.

”This Order may be called the Solar Photovoltaics, Systems, Devices and Components Goods (Requirements for Compulsory Registration) Order, 2017. It shall come into force on the expiry of one year from the date of its publication in the Official Gazette,” the ministry’s notification said.

As per the order, under the Bureau of Indian Standards (BIS) Act of 1986, any manufacturer who manufactures, stores for sale, sells or distributes solar photovoltaics systems, devices or components will make an application to the bureau for obtaining registration for use of the ‘standard mark’ in respect of the Indian standard.

“No person shall by himself, or through any person on his behalf, manufacture or store for sale, import, sell or distribute goods which do not conform to the specified standard and do not bear the standard mark as notified by the bureau,” the notification said. It added that nothing in the order will apply in relation to manufacture of goods meant for export.

The order also said sub-standard or defective goods which do not conform to the specified standards will be deformed beyond use and disposed of as a scrap by the manufacturer or the representative of overseas manufacturer by any agency authorised by the manufacturer as its authorised representative in the India.

It further noted that unclaimed consignment of such goods will be deformed and disposed of as scrap by any department or agency authorised by MNRE. As per the order, sample of the modules of the registered user will be drawn from his manufacturing unit or from the market by the ministry or the authorised person for ascertaining whether they conform to the specified standard.

“The samples shall be drawn at least once in two years for a product or series of products covered under the scope of registration granted,” the notification said, adding that the location and the product to be picked up shall be selected at random.

Source: ET Energy World

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Chinese solar module firms reneging on India contracts – Chinese suppliers are demanding an increase of around 6 cents per watt in prices of solar modules already contracted for

Any increase in solar module prices will impact the internal rate of return (IRR) from such solar power projects, many of which have already signed power purchase agreements (PPAs). Photo: Bloomberg

Any increase in solar module prices will impact the internal rate of return (IRR) from such solar power projects, many of which have already signed power purchase agreements (PPAs). Photo: Bloomberg

New Delhi: In what has come as a shock to India’s solar power developers, Chinese module manufacturers are reneging on their contracts and are demanding an upward price revision to supply the equipment already contracted for, said several people aware of the development.

Any price increase will impact the internal rate of return (IRR) from such projects, many of which have already signed power purchase agreements (PPAs).

Some Chinese suppliers have sought an increase of around 6 cents per watt in module prices in a market which they dominate. Module prices are currently around 37 cents per watt. Modules account for nearly 60% of a solar power project’s total cost.

“Many Chinese manufacturers are going back on their contracts. They are completely reneging on the contracts signed with Indian developers,” said Hero Future Energies chief executive officer (CEO) Sunil Jain.

“We did a contract in June for a delivery in August. The Chinese have come for renegotiation seeking a price increase. The Chinese manufacturers are aware that we have a firm deadline and that the failure to meet it will result in penalties on us, so they have resorted to this strategy,” alleged a New Delhi-based CEO of a firm that has been actively participating in India’s solar auctions, asking not to be identified.

Module prices have firmed up with China extending the feed-in tariff regime—which ensures a fixed price for power producers— for the third quarter, and with US developers placing advance orders to shore up cell and module supplies amid demands for a cap in prices of cheap imports into the US.

“The new Chinese offer is either to accept the new prices or cancel the contract. One can’t work like this,” added a top functionary at the second firm who also didn’t want to be named.

Major Chinese solar module manufacturers include Trina Solar Ltd, Jinko Solar, JA Solar Holdings, ET Solar, Chint Solar and GCL-Poly Energy Holdings Ltd.

“Developers have been complaining about Chinese manufacturers increasing their prices. Since the tariffs have already been discovered and the PPAs signed they may have to take a hit on their IRRs,” said a person involved in devising and running India’s solar park bid process.

A Mytrah Energy spokesperson said in an emailed response: “We wouldn’t like to name names due to obvious reasons but it is fair to say that we have witnessed top-tier and very large suppliers as well as smaller suppliers reneging contracts in a fairly casual manner.”

This comes at a time when states are now looking to renege on their offtake commitments for projects awarded at a comparatively higher tariff triggering concerns that it will precipitate a crisis in the Indian green energy space which has been attracting investors in droves.

Queries emailed to Trina Solar, Jinko Solar, JA Solar Holdings, ET Solar, Chint Solar and GCL-Poly Energy remained unanswered. Queries sent to India’s new and renewable energy ministry spokesperson also went unanswered.

Some believe having long-term relationships with quality suppliers holds the key.

“There can be blips in terms of supply and demand. So one must think about one’s procurement strategy with suppliers having long-term goals rather than ones with transactional approach,” said Inderpreet Wadhwa, founder and CEO of Azure Power.

Source: LiveMint

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Power Sector at a Glance – ALL INDIA – August 2017

Power Sector at a Glance ALL INDIA

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As on 16-08-2017
Source: OM SECTION

1.Total Installed Capacity  (As on 31.07.2017) – Source : Central Electricity Authority (CEA)

Sector

MW

% of Total

State Sector

81,622

24.7%

Central Sector

103,868

31.5%

Private Sector

144,663

43.8%

Total

3,30,154

 

Fuel

MW

% of Total

Total Thermal

2,20,456

66.8%

                                             Coal

1,94,433

58.9%

                                             Gas

25,185

7.6%

                                             Oil

838

0.3%

Hydro (Renewable)

44,614

13.5%

Nuclear

6,780

2.1%

RES* (MNRE)

58,303

17.7%

Total

330,154

* Installed capacity in respect of RES (MNRE) as on 30.06.2017.

RES (Renewable Energy Sources) include Small Hydro Project, Biomass Gasifier, Biomass Power, Urban & Industrial Waste Power, Solar and Wind Energy.

Policy Initiatives / Decision Taken

Electricity Act 2003 has been enacted and came into force from 15.06.2003. The objective is to introduce competition, protect consumer’s interests and provide power for all. The Act provides for National Electricity Policy, Rural Electrification, Open access in transmission, phased open access in distribution, mandatory SERCs, license free generation and distribution, power trading, mandatory metering and stringent penalties for theft of electricity.

It is a comprehensive legislation replacing Electricity Act 1910, Electricity Supply Act 1948 and Electricity Regulatory Commission Act 1998.The Electricity Act, 2003 has been amended on two occasions by the Electricity (Amendment) Act, 2003 and the Electricity (Amendment) Act, 2007. The aim is to push the sector onto a trajectory of sound commercial growth and to enable the States and the Centre to move in harmony and coordination.

Performance of Generation from Conventional Sources

1.0 PERFORMANCE OF CONVENTIONAL GENERATION

1.1 The electricity generation target of conventional sources for the year 2017-18 has been fixed as 1229.400 Billion Unit (BU). i.e. growth of around 5.97% over actual conventional generation of 1160.141 BU for the previous year (2016-17). The conventional generation during 2016-17 was 1160.141 BU as compared to 1107.822 BU generated during 2015-16, representing a growth of about 4.72 %.

1.2 Generation and growth in conventional generation in the country during 2009-10 to 2017-18 :- 

Year Energy Generation from
Conventional Sources
(BU)
% of growth
2009-10 771.551 6.6
2010-11 811.143 5.56
2011-12 876.887 8.11
2012-13 912.056 4.01
2013-14 967.150 6.04
2014-15 1048.673 8.43
2015-16 1107.822 5.64
2016-17 1160.141 4.72
2017-18* 405.891 3.76

* Upto July 2017 (Provisional), Source : CEA

1.3    The electricity generation target of conventional sources for the year 2017-18 was fixed at 1229.400 BU comprising of 1042.028 BU thermal; 141.400 BU hydro; 40.972 nuclear; and 5.000 BU import from Bhutan.

2.0 Plant Load Factor (PLF):

2.1 The PLF in the country (Coal & Lignite based) from 2009-10 to 2017-18 is as under:

Year PLF Sector-wise PLF (%)
% Central State Private
2009-10 77.5 85.5 70.9 83.9
2010-11 75.1 85.1 66.7 80.7
2011-12 73.3 82.1 68.0 69.5
2012-13 69.9 79.2 65.6 64.1
2013-14 65.60 76.10 59.10 62.10
2014-15 64.46 73.96 59.83 60.58
2015-16 62.29 72.52 55.41 60.49
2016-17 59.88 71.98 54.35 55.73
2017-18* 60.43 72.40 55.20 56.27

* Upto July 2017 (Provisional), Source : CEA

3.0 Power Supply Position

The power supply position in the country during 2009-10 to 2017-18 :

Energy Peak
Year Requirement Availability Surplus(+)/Deficts(-) Peak Demand Peak Met Surplus(+) / Deficts(-)
(MU) (MU) (MU) (%) (MW) (MW) (MW) (%)
2009-10 8,30,594 7,46,644 -83,950 -10.1 1,19,166 1,04,009 -15,157 -12.7
2010-11 8,61,591 7,88,355 -73,236 -8.5 1,22,287 1,10,256 -12,031 -9.8
2011-12 9,37,199 8,57,886 -79,313 -8.5 1,30,006 1,16,191 -13,815 -10.6
2012-13 9,95,557 9,08,652 -86,905 -8.7 1,35,453 1,23,294 -12,159 -9.0
2013-14 10,02,257 9,59,829 -42,428 -4.2 1,35,918 1,29,815 -6,103 -4.5
2014-15 10,68,923 10,30,785 -38,138 -3.6 1,48,166 1,41,160 -7,006 -4.7
2015-16 11,14,408 10,90,850 -23,558 -2.1 1,53,366 1,48,463 -4,903 -3.2
2016-17 11,42,929 11,35,334 -7,595 -0.7 1,59,542 1,56,934 -2,608 -1.6
2017-18* 4,12,058 4,09,480 -2,578 -0.6 1,59,816 1,58,393 -1,423 -0.9

* Upto July 2017 (Provisional), Source : CEA

 

Generation (Billion Units)

Generation Growth (%)

   

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India Energy Statistics 2017

India_Energy_Statistics_2017

FOREWORD

Energy being a strategic commodity plays a significant role in economic development of a country. Energy systems in India have evolved over last six decades along with country’s economic development, supporting the aspiration of 1.2 billion people, within the framework of democratic polity, globally integrated economy and environmentally sensitive regime. Ever increasing demand of energy has posed tremendous pressure on its limited resources and has necessitated optimum use of its resources. India pursued a reformed development agenda since 1991. Significant effort has gone into improving energy availability, as support to country’s development initiatives.

For proper planning, statistics plays a vital role. This publication, 24th in the series is an annual publication of CSO and is a continued effort to provide a comprehensive picture of Energy Sector in India. Energy Statistics is an integrated and updated database of reserves, installed capacity, production, consumption, import, export and whole sale prices of different sources viz. coal, crude petroleum, natural gas and electricity. Energy Balance and Sankey Diagram (Energy flow diagram) further aims to enhance its utility. Some of the data may not match with the previous issues owing to definition or data revision by source ministries.

This is for the first time that theme wise energy indicators are being brought out by CSO as part of Energy Statistics for the use of policy makers as well as for comprehensive reporting. Indicators play a vital role by turning data into information for policy makers and help in decision-making. They also simplify a complex and large information base, thus providing a “synthesis” view of prevailing situation.

Identification of list of indicators depends on various factors as transparency, scientific validity, robustness, sensitivity and the extent to which they are linkable to each other. However no single factor can decide all indicators and all situations since each indicator needs different data sets. The indicators are selected on the guidelines/approach followed by IAEA in their publication “Energy Indicators for Sustainable Development: Guidelines and Methodologies”, which was brought out in corporation with United Nations Department of Economic and Social Affairs (UNDESA), International Energy Agency (IEA), Eurostat and European Environmental Agency (EEA).

The data in the publication has been sourced from the subject Ministries of the Government of India. The co-operation and support provided by these Ministries/Departments in compiling this publication is appreciated. I also appreciate the efforts of the officers of Economic Statistics Division, Central Statistics Office in bringing out this publication in a time bound manner. I hope the publication will prove to be useful to the policy makers, planners and researchers working in field of Energy. It shall be CSO’s endeavour to continuously improve the publication both in content and design with the help of user feedback and data source agencies.

ENERGY INDICATORS (2015-16) AT A GLANCE

 

 

Theme Sub-theme Indicator Category                       Unit                     Value
 

Use and Production Pattern

Overall Use  

Energy use per capita

TPES toe/person 0.53
TFC toe/person 0.41
Electricity Kwh/person 777.02
Overall Productivity Energy use per unit of GDP TPES toe/000’rupees 0.006
TFC toe/000’rupees 0.005
Electricity Kwh/rupees 9.55
Supply Efficiency Efficiency of energy conversion and distribution  

All

 

%

 

20.63

 

 

Production

Reserves-to-production ratio All years 172
coal years 216.03
lignite years 140.97
 

Resources-to- production ratio

All years 402
Crude oil years 16.81
Natural Gas years 38.05
Coal years 483
Lignite years 1017
 

 

 

End Use

 

Sectoral Energy Intensities

Industry toe/000’rupees 0.013
Agriculture toe/000’rupees 0.001
Transport toe/000’rupees 0.02
 

Sectoral Electricity Intensities

Industry Kwh/000’rupees 19.17
Agriculture Kwh/000’rupees 10.66
Transport Kwh/000’rupees 3.23
Diversification  

Fuel shares in TPES

Crude Oil % 26.44
(Fuel Mix) Natural Gas % 4.77
Coal % 66.05
RE &Others % 2.74
 

Fuel share in TFC

Oil Products % 37.06
Natural Gas % 5.01
Coal % 41.08
Electricity % 16.85
 

Fuel share in electricity

Thermal % 74.11
Nuclear % 2.81
Hydro % 10.07
Non-Utility % 12.62
 

 

 

Security

 

 

Imports

 

Net energy import dependency

Overall % 38.64
Crude Oil % 84.59
Natural gas % 33.95
Coal % 35.52
Electricity % 0.47
Strategic Fuel Stocks Stocks of critical fuels per corresponding fuel consumption  

Coal

 

%

 

7.78

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Solar and Wind Generators to Pay Deviation Charges for Under Production in Andhra Pradesh

To facilitate large-scale grid integration of solar and wind power while maintaining grid stability, the Andhra Pradesh Electricity Regulatory Commission (APERC) has released new regulations for forecasting, scheduling, and deviation settlement of solar and wind generation with immediate effect.

All grid-connected wind and solar projects fall under the purview of this regulation, including those projects connected through pooling stations and supplying power to DISCOMs (distribution companies), projects supplying power to third parties through open access or for captive consumption through open access, and projects selling power within or outside of Andhra Pradesh.

The APERC in the report said, “The forecasting, scheduling, and deviation settlement as per the new regulation will commence from January 1, 2018, while the levy and collection of deviation charges will commence from July 1, 2018.”

Deviation charges within the state –

If a solar or wind power generator deviates from the schedule, then the generator will be required to pay the deviation charges to the state pool account in the case of under injection of power. In the case of an over injection of power, deviation charges will be paid from the state pool account to the solar or wind generator.

Deviation charges outside the state –

Wind and solar generators will be required to provide power purchase agreement (PPA) rates to the state load dispatch center (SLDC) to prepare their deviation charge accounts.

Source: MERCOM

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Turkey publishes antidumping fee and list for China-based PV manufacturers

A months-long investigation into price dumping in Turkey has concluded, with the Turkish government announcing a list of China-based PV manufacturers who will be subject to antidumping fees for PV imports.

Photovoltaic panels manufactured outside of Turkey are already subject to an import tax, called gözetim vergisi. However, Turkey’s government also initiated an antidumping investigation for imported modules.

The investigation was completed in February, and the committee reported to the Ministry of Economy that it had detected  a 27% dumping rate for modules imported from China.

The whole process was concluded on Saturday 1st April, when Turkey’s government published a list of China-based PV panel manufacturers who are now subject to an anti-dumping fee of US$20/m² in the state gazette.

The list of firms includes:

Hanwha Q Cells (Qidong)
Zhejiang Jinko Solar
Chint Solar (Zhejiang)
ByD (Shangluo) Industrial
Canadian Solar (Changshu)
Canadian Solar (Luoyang)
CEEG (Shanghai) Solar Science Technology
CEEG Nanjing Renewable Energy
Changzhou Trina Solar Energy
Trina Solar (Changzou) Science and Technology
Hainan Yingli New Energy Resources
Yingi Energy (China)
Hefei Chinaland Solar Energy
Jianhsu Seraphim Solar System
Perlight Solar
Renesolar Jiangsu

Furthermore, all other PV panel manufacturers who have set up manufacturing plants in China, and did not respond to the investigation are subject to an antidumping fee of $25/m².

Ates Ugurel, founder of Turkey’s Solar Energy Society Solarbaba, told pv magazine that “the imposed antidumping fee will increase the PV panel’s cost by approximately 30 to 35%. The current average PV panel price is around $0.35/W, and it will now rise to $0.45 to $0.48/W.”

In March, Turkey tendered 1 GW of solar PV capacity, which will comprise a single PV plant in Konya’s Karapinar province. The consortium of South Korea’s Hanwha Q Cells and local Turkish firm Kalyon Enerji won the tender, offering to sell the generated electricity at a feed-in tariff of $0.0699/kWh.

Last month too, Turkey’s energy minister Berat Albayrak said at a conference that the ministry is set to launch a solar and wind tender for 1 GW of new capacity each in mid-summer.

The Konya tender includes requirements for local manufacturing of PV modules, cells, wafers, ingots and inverters, and the industry is waiting to see whether this is also the case for the forthcoming solar tender set to be launched in the summer.

Source: PVMag

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